Choose a Paid Preparer with Care
If you pay someone to do your taxes, choose wisely. Even if someone else prepares your return, you, not the preparer, are responsible for what's on it.
Most preparers ask multiple questions to find out your total income, filing status, expenses, deductions and credits correctly. Your preparer may also want to see your records, income statements, identification cards and receipts. Your preparer does this to help you avoid paying penalties, interest or additional taxes when IRS later checks your tax return and finds errors.
Most preparers are honest and provide excellent service. But, some prepare and file false income tax returns to charge a higher fee. For example, some preparers change the income or expenses to claim the largest amount of Earned Income Tax Credit or EITC. Sometimes you don't even know the preparer put the false information on the return to claim a higher credit but you still have to pay it back plus interest and penalty.
Protect yourself. Make sure you pay the correct amount of tax and get the credits you earn, follow these tips:
- Check the preparer's qualifications. All paid tax return preparers are required to have a PTIN, preparer tax identification number. Ask if your preparer if they have a PTIN. Also, ask if your preparer belongs to a professional organization and attends continuing education classes.
- Check on the preparer's history. Check with the Better Business Bureau to see if the preparer has a questionable history. Also, check for any disciplinary actions and for the status of their licenses. For certified public accountants, check with the state boards of accountancy. For attorneys, check with the state bar associations. For enrolled agents, check with the IRS Office of Enrollment.
- Know the total cost. Ask about all fees - return preparation, printing, electronic filing, deposit, money paid to you in advance of your refund from IRS. Avoid preparers who base their fee on a percentage of your refund or those who claim they can get you a larger refund than other preparers can.
- Make sure the refund is in your name. Make sure IRS sends you the refund or deposits it into an account in your name. Never deposit your refund into a preparer's bank account.
- Ask to e-file your return. Make sure your preparer offers IRS e-file. Any paid preparer who prepares and files more than 10 returns for clients must file the returns electronically, unless you ask to file a paper return.
- Make sure the preparer is available. Make sure you can contact your preparer after you file your return, even after the April 15. Make sure your preparer is there if IRS questions your tax return.
- Never sign a blank return. Avoid tax preparers that ask you to sign a blank tax form.
- Review the entire return before signing. Before you sign your tax return, review it and ask questions. Make sure you understand everything and are comfortable with what's on the return before you sign it.
- Make sure the preparer signs, includes their PTIN and gives you a copy. The law requires a paid preparer sign your return and put their PTIN on the return. The preparer must also give you a copy of the return.
Report suspected tax fraud and abusive tax preparers to the IRS on Form 3949-A, Information Referral or by sending a letter to: Internal Revenue Service, Fresno, CA 93888. Download Form 3949-A from IRS.gov at www.irs.gov/pub/irs-pdf/f3949a.pdf or order at 800-829-3676.
Last updated: 2/12/2013